TSMC in early talks with Musk’s Terafab on Texas chipmaking, Intel shares slide 4%

Elon Musk confirmed on October 3, 2026 that TSMC is in discussions with Terafab about working together on chip manufacturing in Texas. Intel, which signed on as Terafab’s first manufacturing partner back in April, saw its shares fall 4% on the news. The Musk ecosystem now appears to be shopping for a second foundry, and the market noticed. What Musk actually said Musk characterized the talks with Taiwan Semiconductor Manufacturing Company as early stage. No agreements have been reached. According to the research findings, the discussions cover a couple of possible structures. In one, TSMC would operate the Texas facility itself, with Terafab serving as the anchor customer. In the other model, TSMC would contribute its manufacturing expertise while other investors hold majority ownership of the facility. TSMC would supply the know-how, and someone else would own most of the building. Neither option has been agreed to. Both remain on the table as part of the preliminary talks. What Terafab is trying to build Terafab is a joint effort between Tesla, SpaceX, and xAI. The goal is a vertically integrated semiconductor fabrication complex. The project is built around anticipated demand fo...